A compelling argument for using P3s to develop and operate infrastructure is that the role of regulator is separated from the role of operator. The decision to set and enforce standards should not be conflicted by the obligation to fund service or equipment upgrades to achieve the standards. In the case of infrastructure that the public considers to be implicit to a high quality standard of living (clean water, modern hospitals, convenient transportation, well-maintained roads), the separation between regulatory and operational functions is quite compelling. It is the government's job to ensure public services are adequately provided, not necessarily provide them. When these two functions reside within the government or in an agency of the government, the potential for conflicts exist. Ontario's gas industry provides an excellent model of efficiency and objectivity, where prices are relatively stable, regulations are effective and operations are efficient.
As with any outsourced government service, there is a perceived risk that the further away the government is from providing the service, the less control it has over protecting the public interest. However, the provision of public goods and services is only as good as the standards and regulations that govern them. Where the Government will be breaking new ground when it comes to collaboration with the private sector, the mechanisms for regulatory control will need to be worked out before any asset is built or contract drafted. Again, however, the greatest value will be gained by regulatory controls that are output rather than input based.